The Alaska Senate Resources Committee on Feb. 25 moved Senate Bill 176 out of committee, advancing legislative approval of a Department of Natural Resources contract to sell Alaska royalty oil to Marathon Petroleum’s Kenai refinery.

The measure approves a negotiated in‑kind sale of state royalty crude to an in‑state refiner and completes the public process that includes a best interest finding by the royalty board and final legislative sign‑off, Ryan Fitzpatrick, commercial manager at the Alaska Department of Natural Resources, Division of Oil and Gas, told the committee.

The bill matters because the contract affects supply to the Kenai Refinery and state receipts tied to royalty production. Casey Sullivan, government and public affairs manager for Marathon Petroleum, told the committee the agreement is a three‑year contract with optional extensions and said the “availability, the flexibility and the stability that this new 3 year contract … will have a positive impact on our ability to optimize our ongoing operations at the Marathon Petroleum Kenai Refinery.” Sullivan said the refinery can process about 68,000 barrels per calendar day and employs more than 300 full‑time Alaskans.

Committee action and next steps
Senator Wilikowski moved to report SB176 out of committee "with individual recommendations and attached fiscal notes" and allowed legislative legal to make technical and conforming changes. Chair Senator Giesel recorded "seeing no objection, the bill is moved from committee." The committee did not take a roll‑call vote on the record; the clerk recorded the bill as reported out of committee and staff were asked to prepare transmittal documents for signatures.

What the bill does and what officials said
Fitzpatrick described the legislative step as the final approval in a multistage public process: "The Department of Natural Resources negotiates contracts with in‑state refiners for the sale of Alaska's royalty oil, in kind to those refineries," he said. Fitzpatrick said the contracts are renewed every few years and go through the royalty board's best interest finding before reaching the legislature.

Marathon’s public‑affairs testimony emphasized local operations and jobs. Sullivan said the Kenai Refinery produces transportation fuels and products including gasoline, jet fuel, diesel, propane and asphalt and distributes products through terminals at Kenai, the Port of Alaska and North Pole. He asked the committee for support of SB176.

Provenance
The committee heard the bill and Fitzpatrick’s explanation at the start of the hearing. Public testimony from Marathon and the committee motion reporting the bill appear later in the transcript.

Ending
Committee members were asked to remain after the hearing to sign transmittal paperwork. The committee did not amend the bill on the floor of the hearing and recorded the bill as reported out for further consideration in the legislature.